All subscription clients with CIRCLE Recruitment & HR have already been notified about the changes to the way part time personal Carers Leave is accrued. This is a service some like to pay for, to ensure that they are at the forefront of the latest Human Resource and Industrial Relations issues and have an outsourced HR department that is proactive and looking after their interests 24/7.

Our newsletter is a secondary font of information where all our clients can read the latest news, and make sure they are aware of any changes to the Industrial Relations landscape, that might put their business at risk.

If you are not a subscription clients with us, please read the memo below and consider if you need to give us a call, and book some time to discuss how this impacts your business. We are specialists at devising client driven strategies to ensure compliance, protect from breaches of the Fair Work Act, minimise employee claims and grow your economic outcomes through better people management.

In a landmark judgment on leave entitlements, (Mondelez v AMWU 2019), the Federal Court has confirmed that employees are entitled to 10 days of Personal Carers Leave regardless of the pattern of hours worked.

This decision means, that regardless of the amount of days per week, your part-time employee works; they will accrue 10 days of personal carers leave, not in a pro-rata manner as previously, but simply 10 days. The simple equation would be 10/52 = amount of Personal Carers Leave accrued per week for a part time employee, regardless of if they only work one day per week.

However, if their average working day is only 5 hours, their 10 days are made up of 10 x 5 hour days and if their average day is 12 hours, then their 10 days are comprised of 10 x 12 hour days. In effect, each part time employee has a right to be absent from work, on paid Personal Carers Leave for ten calendar days per year, irrespective of what ordinary hours they work in their day.

The Fair Work Ombudsman, responded by updating the Fair Work Information Statement, so that it no longer includes wording around pro-rata entitlements. Make sure you have the latest Fair Work Information Statement to give to your new employees or contact us if you need any assistance.

The issue is that most payroll systems accrue leave based on hours and not days. To be compliant, payroll systems would have to change the way they accrue. For many businesses, this is an onerous task depending on the numbers of employees, and is of major concern to business, employer groups and Government.

HOWEVER, the Australian Government and Mondelez Australia Pty Ltd have applied to the High Court seeking special leave to appeal the decision. This means that the decision could be upheld, reversed retrospectively, or reversed from a certain date – this remains to be seen.

Fair Work Advice:

• Review your payroll systems, for all part time employees and from 21 August 2019, where leave is accrued on an hourly basis, ensure those hours equal 10 days.
• The leave must be calculated in working days, not hours.
• A working day is the portion of a 24 hour period that an employee would otherwise be working.
• An employee’s entitlement is expressly based upon time working for the employer and is expressly calculated in days.
• For every day of personal/carer’s leave taken, an employer deducts a day from the employee’s accrued leave balance. If an employee takes a part-day of leave, then an equivalent part-day is deducted from the employee’s accrued leave balance.

What are we doing?

Considering the relatively few part-time employees we have and the fact that an appeal may change the situation, we are acknowledging the new interpretation of the law and the rights for permanent part-time employees to receive 10 days personal carers leave. We are not at this stage, changing our payroll system immediately, but will be manually tracking the difference in accrual percentages for our workers since 21/8/19. When the dust settles from appeals, we will either revert to the previous pro-rata system, or will change our format for accruals and add in adjustments for the time period we have tracked. In this way we can give correct accruals at any time by adding our adjustments to the current balances, and hold off on any major changes till the results of appeals are known.

The fine line between compliance with the law and business practicality, at times, can be a difficult one, and at all times, we regard compliance with the laws as paramount. However the practicalities around massive payroll changes and understanding a new regime, when they may be overturned shortly, should engage your HR professional to devise contextual strategies that will work for your organisation.

If you feel you need more sophisticated advice, contact CIRCLE Recruitment & HR, we are masters at contextual strategies and client focused services. We feel that this approach is in line with the current laws and sensible, given that this may all blow over, and if not we can quickly adjust our payroll.

If you wish to discuss these issues and your business, please call the office on 1300 923 000 and we are only too happy to work with you through this situation.

Of course we will update you as the situation unfolds. Remember the large fines that Fair Work invoke for being in breach of the Fair Work Act.

Important Note: These articles have been prepared for general circulation and are circulated for general informational purposes only; these articles should not be regarded as business or investment advice. The articles represent the views of the writers and are subject to change without notice. Additionally, while every care has been taken in the preparation of the articles no representation or warranty as to accuracy or completeness of any statement is given. An individual or organisation should, before any business or investment decision is made, consider the appropriateness of the information in this document, and seek professional advice, having regard to objectives, situation and needs. This document is solely for the use of the party to whom it is provided.